In a move likely to strike terror into the heart of anyone who has struggled to put together an Ikea wardrobe, the iconic Swedish furniture chain is to launch its own range of houses in Britain.

The good news, though, is that Allen keys will not be required, as the timber-framed homes will come ready-built.

The houses - known as BoKloks in Scandinavia, Swedish for "live smart" and pronounced "booklook" - are being launched by the flatpack furniture group as a solution to Britain's lack of affordable housing.

Flats will be priced at under £100,000 and the company said it expects to sell three-bedroom houses, even in south east England, at less than £150,000.

The homes will all have high ceilings, double glazing and be fitted out with Ikea kitchens and trademark wooden floors.

With first-time buyers facing an increasingly tough struggle to get on to the housing ladder, the group is expecting big demand for the homes and potential buyers may even have to be chosen by lottery.

BoKlok homes have proved popular in Scandinavia in recent years and around 800 are now sold each year in Sweden.

They will be developed here under licence by Live Smart @ Home, part of the affordable housing provider, Home Group. It plans to roll out the concept nationally over the next couple of years and aims to produce 500 homes a year by 2009. It will be talking to local councils, developers and regeneration bodies such as English Partnership about setting up sites.

Alan Prole, managing director of Live Smart @ Home, said the homes will be "like nothing else seen before in the UK" and would play an important role in helping first-time buyers get on the property ladder.

The first development of 90 BoKlok flats and houses is expected to be built in Gateshead early next year, and will be marketed through the Ikea store in Gateshead. Live Smart @ Home stressed today that Ikea shoppers will not be able to buy a flatpack home off the shelves, as they are "not suitable" for self-build projects.

The BoKlok homes will be aimed primarily at households earning between £15,000 and £35,000 a year and will be sold outright or on a shared ownership basis.